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Ideal Power Reports First Quarter 2019 Financial Results

Ideal Power Inc.May 1, 2019

AUSTIN, Texas, May 01, 2019 (GLOBE NEWSWIRE) -- Ideal Power Inc. (NASDAQ: IPWR), a semiconductor and power conversion technology company, reported results for its first quarter ended March 31, 2019.

Key First Quarter 2019 and Subsequent Highlights:

Power Conversion Systems (PCS) Division

-- In April, announced agreement to sell PCS business and Power Packet Switching Architecture (PPSA™) technology to PATHION Holdings, a provider of safe and intelligent energy solutions, for a combination of cash, PATHION Holdings common stock and the assumption of certain liabilities. Transaction synergies include: - Transaction strategically positions Ideal Power with new asset light model focused on B-TRAN™ solid state switch commercialization; - PPSA technology to be positioned into more integrated platform with broader market reach; - Right size facility as PATHION will sublease approximately 80% of Austin, Texas headquarters; and - Reduction in cash outflows for Ideal Power with proforma cash burn rate expected to be $600 thousand to $700 thousand per quarter starting as of the transaction close date.

B-TRAN™ Division

-- Shifted to commercialization of our patented B-TRANTMtechnology for the $12 billion global semiconductor power switch market. -- Completed first prototype drivers and proceeding with internal evaluation and preparation for customer sampling. - Second generation dies are currently in process at three independent sources. - Sampling efforts will move forward based on results of our characterization efforts on our second generation die, packaging and prototype driver. - Engineering samples for potential customers and partners expected in Q2 2019. -- Increased internal capabilities for device design, testing and characterization by: - Bringing in-house device simulation capability; - Installing wafer probe tester to characterize fabricated die in our engineering laboratory; and - Adding the capability to design and program device drivers for various configurations of packaged B-TRANs™. -- Completed packaging design and vendor selection for second generation die. -- Identified several government funding opportunities for device specific development and B-TRAN based demonstration projects. -- B-TRAN™ Patent Estate: As of March 31st, we had 44 issued B-TRAN™ patents with 11 of those patents issued outside the United States in China, Europe and Australia. Our pending B-TRAN™ patent portfolio includes approximately 30 patent filings and contains applications in Japan, South Korea and India.

Management Commentary

“With our new strategic focus announced in early 2019, we will become an asset light operating company focused on our B-TRAN power switch technology,” said Dr. Lon Bell, Chief Executive Officer of Ideal Power.

“This transaction allows us to focus our efforts on the development and commercialization of our proprietary B-TRAN technology. Our business model leverages capabilities at existing semiconductor fabrication facilities, collaborations with major universities and our relationships with semiconductor experts to complement our internal modeling, power switch development and characterization capabilities.

“Moreover, success of PATHION in the marketplace would directly benefit our shareholders through Ideal Power’s equity stake in PATHION. We are excited to enter into this opportunity for our shareholders and to pass the torch to PATHION to take our PPSA technology into broader distribution as part of their comprehensive energy solutions offering,” concluded Bell.

First Quarter 2019 Financial Results

-- Q1 2019 loss from continuing operations was $694 thousand compared to $975 thousand in Q1 2018. The decrease in loss from continued operations was primarily due to cost reduction activities, including lower headcount. -- Q1 2019 loss from discontinued operations was $347 thousand compared to $1.1 million in Q1 2018 due to our exit from the power conversion business in early January 2019. -- Q1 2019 net loss was $1 million compared to $2.1 million in Q1 2018 -- Q1 2019 cash used in operating activities from continuing operations was $587 thousand compared to $885 thousand in Q1 2018. -- Cash and cash equivalents totaled $2.2 million as of March 31, 2019, with no long-term debt outstanding.

“Given our new strategic focus and the presentation of our PCS division as discontinued operations, we had no revenue from continuing operations in the first quarter of 2019,” said Tim Burns, Chief Financial Officer. “We reduced our PCS division workforce and suspended further power converter system development and sales in early January. As a result of these actions and the pending sale of this division, we now estimate that annualized cash expenditures will be reduced by at least $3 million,” continued Burns.

“On the cash management side, we maintained our targeted cash burn rate, utilizing $1 million of cash in the first quarter of 2019, due to aggressive cost cutting initiatives, compared to $2.1 million in the first quarter of 2018. We believe that strong cash management, our pending PPSA sale and no debt will provide us with a stable financial runway into 2020,” concluded Burns.

Conference Call Details

Ideal Power Chairman, CEO and President Dr. Lon Bell, CFO Tim Burns and B-TRAN Chief Commercial Officer Dan Brdar will host the conference call, followed by a question and answer period.

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1-949-491-8235.

About Ideal Power Inc.Ideal Power (NASDAQ: IPWR) is a semiconductor and power conversion technology company focused on its patented Bi-directional, Bi-polar Junction Transistor (B-TRAN™) semiconductor technology. B-TRAN is a unique double-sided bi-directional AC switch expected to deliver substantial performance improvements over today’s conventional power semiconductors. B-TRANs offer the potential to improve efficiency and system economics of a wide variety of power converter applications including electrified vehicle traction drives, energy storage applications, photovoltaic (PV) inverters and wind converters, variable frequency (VFD) motor drives, and AC and DC power control applications. For more information, visit www.IdealPower.com.

Safe Harbor StatementAll statements in this release that are not based on historical fact are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While management has based any forward-looking statements included in this release on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not limited to, the successful closing of the sale of our PCS business, the success of our B-TRAN technology, the success of our strategic shift and change in corporate focus, whether the patents for our technology provide adequate protection and whether we can be successful in maintaining, enforcing and defending our patents, our inability to predict with precision or certainty the pace of development and commercialization of our B-TRAN technology, whether we can continue as a going concern and uncertainties set forth in our quarterly and annual reports filed with the Securities and Exchange Commission. Furthermore, we operate in a highly competitive and rapidly changing environment where new and unanticipated risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. We disclaim any intention to, and undertake no obligation to, update or revise forward-looking statements. Ideal Power Investor Relations Contact: MZ North America Chris Tyson 949-491-8235 IPWR@mzgroup.uswww.mzgroup.us